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BROOKE BALDWIN, CNN ANCHOR: Good to see all of you. I'm Brooke Baldwin.

For weeks three Republican senators have been slamming Susan Rice and the Obama administration. Why? All over their response to the attack in Benghazi. Well, today, both sides came face to face. You are about to hear what happened inside that meeting and why those senators are not satisfied today.

But first, the urgent situation that has everyone's attention. Members of the House, they're officially back to work as of right now, this hour. You know senators returned to Washington yesterday. So everyone finally on the job after their week long Thanksgiving break. That gives Congress and the president, count them with me, 35 days to avoid the dreaded fiscal cliff. You know, that huge package of tax hikes and spending cuts set to take effect January 1 if Congress and the president do not cut a deal.

We're told they have been talking behind the scenes and President Obama has already hosted congressional leaders for a post election sit-down. But the president is also launching a new PR effort. A campaign, some are calling it here, starting with the White House meeting today of small business owners. Then tomorrow, the president hosts more business owners and a group of middle class Americans who would be hurt if the tax hikes take effect the first of the year. Then Friday, it's a campaign style stop in Pennsylvania. A toy factory of all places, highlighting the importance of middle class consumers in this holiday season.

But back in Washington, Senate leaders, they are speaking out. You have Democrat Harry Reid saying the president won the election and it's time for Republicans to fall in line. Meantime, Republican Mitch McConnell, he's not impressed with the president's plans to go back on the road. Take a listen.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: Look, we already know the president's a very good campaigner. We congratulate him on his re- election. What we don't know is whether he has the leadership qualities necessary to lead his party to a bipartisan agreement on big issues like we currently face.

SEN. HARRY REID (D), MAJORITY LEADER: The last year of his campaign, every place he went, that's what he talked about. Americans, when they voted, raised their voices and supported our pledge. Congress must act in accordance with the will of the American people.

(END VIDEO CLIP)

BALDWIN: Let's kick this conversation off in Washington. Republican Rand Paul of Kentucky, he is joining me. He is Kentucky's junior senator, elected in 2010. And you probably know this, it bears repeating here, Senator Paul is opposed to raising taxes, raising anyone's taxes, even as some, as we've been talking in the last 24, 48 hours, some in his party are flirting with compromise on that issue.

Senator Paul, welcome. Thank you for joining me.

SEN. RAND PAUL (R), KENTUCKY: Good to be with you.

BALDWIN: You know, we did just get a little update from the White House on the fiscal cliff negotiations. So just take a listen to this, if you would.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: The president spoke with the speaker of the House, as well as the Senate majority leader, over the weekend. He will continue to have discussions with those two leaders, as well as Leader Pelosi and Senator McConnell in the days and weeks coming forward. I don't have a schedule for those conversations to provide to you, but he will speak with them and meet with them as appropriate.

(END VIDEO CLIP)

BALDWIN: Senator, all this talking, will you tell us, tell Americans, if you're in the loop, if you are privy, tell us who's talking to whom in these fiscal cliff negotiations and where are the talks happening?

PAUL: Well, you know, I'm not included in those talks. I've been talking with the folks in my state, in Kentucky, though, and they're not interested in, you know, raising taxes. They think it's a bad idea for the economy. The only way to have a stimulus to the private sector is to leave more money in the private sector.

The other thing that folks in Kentucky don't understand is, is that, why isn't it a fiscal cliff to cut spending? Most people in our state think that we're spending too much money up here and that we should cut spending. In fact, the majority of Congress voted for this sequester. Why was it a good idea a year ago and now it's not a good idea.

BALDWIN: On spending and spending cuts, it sounds to me you may actually have something in common with the president, which I want to get to. But you mention, you know, the people in your great state of Kentucky and, look, they know, and we're all hoping they're all out and about shopping, right, it's holiday season. And in terms of the timing with this -- with this deal, you know, hopefully getting done before January 1, a lot of people want to avoid the tax increase that will automatically happen as people are paying those holiday bills, right? PAUL: But here's my question. If it's bad to raise taxes on everyone, why is it good to raise it on half of the nation's income? Everybody says, oh, it's just a few rich people. Well, those rich people are half of the nation's income, about 40 percent of the nation's income. So it's a bad idea to raise it on 100 percent of the nation's income, why is it a good thing to raise taxes on 40 percent of the nation's income?

I think it's bad to take more money out of Kentucky, more money out of my town in Bowling Green. I'd just as soon leave it there. And I'm not too concerned who has it, if the people who earned it still have it. Whether they're rich, middle class or poor, it's in the private sector and it's in Kentucky buying goods. I don't want it sent up here because I've seen what they do up here. Last year we spent $3 million to study monkeys on meth. We spent $2 million --

BALDWIN: I don't think a lot of people in this country want to hear that and I think most people would agree that is a heck of a waste of time. But when we talk about this, Senator Paul, and we talk about taxes and we talk spending, I mean, look, the president has set this goal of $4 trillion in debt reduction over the next 10 years. I mean $4 trillion, that's not chump change. Would it be possible --

PAUL: Well, yes and no. Yes and --

BALDWIN: Would it be possible -- hang on, hang on, senator, would it be possible that you and the president maybe agree on some of the means to getting to the $4 trillion, and, if so, where might you agree?

PAUL: Well, I think where I'm willing to compromise is that I'm one of the conservatives who believe that national defense is very important, but I'm willing to say that not all money spent on the military is sacred. So I would compromise there.

BALDWIN: OK.

PAUL: But I'm not willing to raise taxes when we're still spending $300,000 a year on robotic squirrels to watch rattlesnakes attack a robotic squirrel that doesn't wag its tail to see whether or not the rattlesnake will still attack the robot squirrel. $300,000. $2 million spent on how we can convince Chinese prostitutes not to drink so much on the job.

BALDWIN: Let me -- let me just -- let me cut you off because I can hear -- I can hear it --

PAUL: There's a huge amount of waste. There's a huge amount of waste.

BALDWIN: I can hear the Americans shaking their heads. But let me ask you this. If you're OK compromising on defense, what about possibly, Senator Paul, raising the Medicare retirement age? It's been put out there in previous negotiations.

PAUL: Yes.

BALDWIN: Both Democrats and Republicans saying, you know, raise it from 65 to 67. Would you be on board with that?

PAUL: Yes.

BALDWIN: Yes.

PAUL: But I don't think we have to trade tax increases for entitlement reform because we should fix entitlements because they're broken. We shouldn't raise taxes because it's bad for the economy.

BALDWIN: But shouldn't Democrats -- shouldn't Democrats give and Republicans give at the same time?

PAUL: I don't --

BALDWIN: I mean I know Democrats say, hey, we won the election, but let's -- let's be fair.

PAUL: I know, but the way I look at it is, entitlements are broken and it's not my fault, it's not Democrats' fault, it's because your grandparents had too many babies. It's because we're living longer. These are just facts. Why not just fix entitlements instead of saying, oh, only -- I will only fix entitlements if you let me tax rich people. Well, taxing anyone in a weak economy is not good. The way revenues will increase in our country and the way we will balance our budget or have less of a deficit is to let the economy grow. Raising tax rates on rich people will not help the economy grow. In fact, it will send the economy in the wrong direction.

BALDWIN: I understand. I know you signed a pledge and you are sticking to that pledge with regard to the people you represent.

So let me just move on and ask you this, senator. You have indicated you are interested in running for president. Tell me this, here, how exactly -- how interested are you and have you taken -- I know you smile because you've been asked it before, but let me just ask you as well, because I want to know, have you taken any concrete actions to start lining up support? Honest answer, please.

PAUL: Well, you know, what I have said is I won't deny that I'm interested. A little bit different than I am interested. But I am --

BALDWIN: OK, let's read -- let's read between the lines. What does that really mean, sir?

PAUL: Let's read between the lines. I want to be part of the national debate. I think my party, the republican Party, is shrinking. We're in danger of becoming a dinosaur. We're not competitive on the West Coast. We're not competitive in New England. And we weren't competitive around the Great Lakes.

So we need a new type of Republican. I think that involves some of the ideas of libertarian leaning Republicans,. People who believe in a less aggressive foreign policy. People who believe that we're not going to deport 12 million Hispanic folks and send them home.

BALDWIN: Hang on. Senator Paul, let me go back to something you said. Why are you afraid of become a dinosaur?

PAUL: Well, because when you look at it, we're not competitive in huge areas of the country. You know, some of the biggest states, California and New York, Illinois, we're not competing anymore. In fact, we don't even advertise there. And once you give up those electoral votes, we're getting down to where we have to win Ohio every time. We have to win Florida and Ohio every time.

And so really what we need to do is be competitive throughout the United States, and I think young people want a less aggressive foreign policy. They don't want to put people in 20 years in jail for marijuana use or non-violent crimes.

BALDWIN: OK.

PAUL: And I think they want a little bit different approach to immigration.

BALDWIN: OK. You say you want to be part of the national dialogue. Perhaps a bigger part of it. We shall see. Senator Rand Paul, thank you so much. We appreciate it.

PAUL: Thank you.

BALDWIN: And now to the face to face meeting today between U.N. Ambassador Susan Rice and her chief Republican critics. Ambassador Rice on Capitol Hill just this morning to meet with the people you see on your screen here. You have Senator John McCain, Lindsey Graham, Kelly Ayotte. She went there to answer concerns the trio still has over statements the ambassador made about the attack on the U.S. Benghazi -- U.S. mission in Benghazi, I should say, back on September 11th that left Ambassador Chris Stevens and three other Americans dead.

I want you to listen to what Senator Graham, Republican, South Carolina, here, said immediately after the meeting ended.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: Bottom line, I'm more disturbed now than I was before that the 16 September explanation about how four Americans died in Benghazi, Libya, by Ambassador Rice, I think does not do justice to the reality at the time, and in hindsight clearly was completely wrong. But here's the key. In real time, it was a statement disconnected from reality.

(END VIDEO CLIP)

BALDWIN: And now here is Senator Ayotte.

(BEGIN VIDEO CLIP)

SEN. KELLY AYOTTE (R), NEW HAMPSHIRE: I want to say that I'm more troubled today knowing -- having met with the acting director of the CIA and Ambassador Rice, because it's certainly clear from the beginning that we knew that those with ties to al Qaeda were involved in the attack on the embassy. And clearly the impression that was given, the information given to the American people, was wrong. In fact, Ambassador Rice said today, absolutely it was wrong. I don't understand the CIA said clearly that that information was wrong.

(END VIDEO CLIP)

BALDWIN: Dana Bash, let me bring you in, senior congressional correspondent. I think I saw you in that crush of reporters earlier today on The Hill. Set me straight. I mean, heading into this closed door meeting, the story was that the senators seemed to be -- or at least John McCain specifically, kind of backing off some of the criticism of Ambassador Rice. In listening to that stakeout and those three senators, I'm hearing words like "troubled" and "failed" and "bad." What happened in the meeting?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, the reason I'm told that they did soften their rhetoric -- and they definitely did going into this meeting -- is because Susan Rice requested a meeting and the senators said that they felt that it was the right thing to do to kind of ease up on her publicly while they were waiting to hear what she said privately. But as you could hear from the senators, they were less than pleased -- that is probably an understatement -- with what they heard.

And, you know, that's their side of this. On the other side, the Democrats who I've talked to feel that they did not think the meeting was as bad as the Republicans made it out to be. And we actually have a statement on the record, a statement from Susan Rice herself, talking specifically about those talking points, those unclassified talking points that she used that turned out to be wrong on (INAUDIBLE).

BALDWIN: What did she say?

BASH: And I'll read it. She said, "the initial assessment upon which they were based were incorrect in a key respect. There was no protest or demonstration in Benghazi. While we certainly wish that we had had perfect information just days after the terrorist attack, as is often the case, the intelligence assessment has evolved. We stressed that neither I nor anyone else in the administration intended to mislead the American people at any stage in this process, and the administration updated Congress and the American people as our assessments evolved."

Now, that's her side. She admitted, I'm told, behind closed doors, it was wrong. I'm told that she said, I regret that I was a part of this. That this happened. And she made that very clear. But these Republican senators, I talked to them afterwards, specifically Kelly Ayotte, she said that what concerns her the most is that the ambassador didn't ask enough questions before publicly going out and being the face and words of the administration about what exactly happened. And that was -- it was her responsibility to do so.

BALDWIN: On those five different shows. You know, I'm just curious, sort of like the public perspective versus the perspective on Capitol Hill behind those three senators, because we have this new poll, 54 percent are dissatisfied with the administration's Benghazi response but do not think officials deliberately misled the public. Is that the view on Capitol Hill?

BASH: You know, probably. I think if you say 54 percent, let's just talk about the Senate, the place where --

BALDWIN: Democrats.

BASH: That has the ability to approve -- or even just generally the ability to approve or not Susan Rice's nomination. I would guess that it's probably about 54 percent who would say, yes, maybe more at this time.

The issue, though, is that you do have Republican, like the three who Susan Rice met with, and others like Senator Bob Corker, who is meeting with her tomorrow, who is saying really in an outspoken way today to Ted Barrett (ph), our congressional producer, and others in the hallway, he thinks that she's just political. That she would be best for the chair of the DNC, the Democratic National Committee, not the State Department. So that really is another really, really important subplot here, Brooke, that these Republicans think that she was chosen to go out on these Sunday shows in -- because she is somebody who has a political sensibility -- it was weeks before the election -- and that she, you know, that's kind of the spin she put on it.

Now, in fairness to Susan Rice, I talked to Democrats who say that, you know, look, who else was going to go out there? Hillary Clinton, we're told, simply did not want to do it because she had lost one of her own and she was in a bad state.

BALDWIN: Sure.

BASH: And that she was the appropriate person to do it at the time. That is going to be debated until the end of time, I think.

BALDWIN: OK. Dana Bash, we thank you for that.

I want to keep this conversation going when it comes to the ambassador, because, you know, it's pretty apparent the administration is putting Rice here in the spotlight. So who exactly is she? My next guest talks about the ambassador's reputation as a pretty tough diplomat. And the time she -- she showed the bird to a certain someone in a meeting.

Plus, the Egyptian president standing firm in the face of protest over his recent power grab. And today those protests have turned deadly.

(COMMERCIAL BREAK)

BALDWIN: Want to keep the focus here on Ambassador Susan Rice. Ambassador Rice has been the center, as you know, of this political firestorm ever since the Benghazi attack happened this past September and then the comments she made on multiple Sunday morning talk shows. Well, now her name is being tossed about very seriously as a replacement for Secretary of State Hillary Clinton. So we wanted to know just the back story. Who really is Susan Rice.

And I wanted to bring in Jay Newton-Small. She is the foreign policy correspondent for "Time" magazine. And she recently wrote this article basically going through the pros and the cons for Ambassador Susan Rice as a potential secretary of state pick.

So, good to see you, Jay.

You know, to be clear, President Obama hasn't come out and said, I want Susan Rice as my next secretary of state, but there -- as you write in your piece -- there are these whispers, right, to multiple media outlets that she is his number one choice. They have a great rapport. How did that develop?

JAY NEWTON-SMALL, FOREIGN POLICY CORRESPONDENT, "TIME": Well, I mean, to be fair, he did come out in his press conference and say, look, if I want to name her and if I think she's the most qualified person, I'm --

BALDWIN: He defended her, yes.

NEWTON-SMALL: Yes. And he sort of threw down the gauntlet and said, you know, I kind of -- that's what everyone thinks, that she's going to be named. But they have actually been really close. I mean, when I covered the 2008 campaign, she was out campaigning for him and she actually defied -- I mean you have to remember, she served in the Clinton administration. Her meant wears Madeleine Albright. And she worked very closely with Bill Clinton. And so it was assumed that she would actually endorse Hillary Clinton. And when early on in the 2007- 2008 campaign she actually endorsed Barack Obama, the Clintons felt very betrayed. And she -- and it actually got her a lot of sort of street cred with Obama and she became really his top foreign policy advisor almost throughout the entire campaign and they were very, very close.

BALDWIN: In terms of policy, I was reading this column by Colum Lynch (ph) in "Foreign Policy," and he writes about how Rice is really a proponent of humanitarian intervention and so, you know, if she is appointed to this post, that she may not be the one pressing for intervention in Syria.

NEWTON-SMALL: She's -- I mean back when she was in the Clinton administration, she actually was head of international peacekeeping and the national security council. And it was during the time of Rwanda. And she actually famously said that she would rather sort of burn her own career down, rather than making the mistake of not intervening in genocide again. And she's widely credited with sort of pushing the Obama administration into going into Libya and has also pushed really hard to get into Syria as well.

BALDWIN: You write something in your piece that I know I hadn't heard about. So let me just read this for our viewers.

"She famously flipped Richard Holbrooke the bird in a meeting years ago and she's known to have sharp elbows." Reading she might -- you know, one of her favorite words is a word I cannot repeat on television. So she seems tough. I mean that could be a good thing, Jay, especially in politics. But in diplomacy, you write, not so much. Why?

NEWTON-SMALL: Well, I mean diplomacy is the art of sort of saying incredibly polite things, you know, in front of the public. And when you go on cameras and you go on television, as she did, on the Sunday shows after the Benghazi attacks, it's about -- the less you say, the better. And it's about saying the really harsh things behind the scenes, but then in the front of the cameras, not so much. And it's sort of the opposite of politics. In politics you say the really harsh things in front of the cameras and then you say, OK, I'll compromise here or there and everywhere behind off the scenes. And so, in that sense, she is pretty political. And -- I mean, but we have had political secretaries of state before. James Baker comes to mind. He was like a bull in a China shop, and yet he was incredibly effective.

BALDWIN: Crane catches fire just before collapsing. Look at this. We are now hearing it involves the same company behind that crane accident in New York during Superstorm Sandy. That's next.

(COMMERCIAL BREAK)

BALDWIN: Egyptian protesters spent another day on the streets of Cairo, calling their president the new pharaoh, fearful of another dictatorship. At least one demonstrator was killed today. The opposition says he died after inhaling excessive amounts of tear gas. Tahrir Square now, look at this, a tent city. Demonstrators say this is where they will remain until President Mohamed Morsi backs away from his controversial decree, which says no person, no authority can overrule his decisions until a new constitution is put in place.

Tissue samples from Yasser Arafat's body are now in the hands of forensic experts. His grave was opened today in Ramallah. The samples were taken from his remains. The exact cause of the former Palestinian leader's death has long been a mystery. Now testing will be done to find out if Arafat was, in fact, poisons.

(BEGIN VIDEO CLIP)

TAWFIQ TIRAWI, PALESTINIAN INVESTIGATION COMMITTEE (through translator): The indications we have or the convictions we have that Israel have done this assassination, but yet we still need evidence.

(END VIDEO CLIP)

BALDWIN: Israel, meantime, has denied those allegations.

And a fiery scene in downtown Sydney, Australia, today. Look at this with me and you're going to see a cab, look at this, of a construction crane engulfed in flames. Black smoke. Folks, it gets worse, because this is the moment when the crane, this arm here, actually collapses, falls into a building, barely misses the busy street below. Here's where the story gets a little bit more intriguing. The operator of the crane, Lend Lease, was also the manager of that crane that collapsed in New York during Superstorm Sandy.

Drugs, gangs, murder. One expert says that is exactly what many Americans think of Mexico. And the country's newest leader here, the president elect, about to sit down with President Obama in Washington just about an hour from now. Coming up next, what this could mean for the immigration fight in America.